Managerial Acounting 5th edition

Green with Envy provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.

Depreciation $1,500 per monthAdvertising $200 per monthInsurance $2,000 per monthWeed and feed materials $13 per lawnDirect Labor $12 per lawnFuel $2 per lawn

Green with Envy charges $60...

Feb 03 2012 09:02 PM

3 Approved Answers

Mark B
answered on February 04, 2012

3 Ratings,
(9
Votes)

fixed costs are depreciation, advertising, and insurance and total $3700 per month. variable costs the other costs and total $27 per lawn. the contribution margin is 60 - 27 = 33. a. To find the number of lawns at break even point divide the fixed costs (3700) by the...

ntribution margin (33) and get 112.1, round up 113. (it's better to round up in break even analysis). b. for dollars, multiple the answer from a (113) by $60 per lawn and get 6780.

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